Radio ‘shock jock’ Howard Stern looks set to sign a new contract with pay-radio operator SiriusXM. Such is his fame – and popularity with subscribing fans – that he looks like winning a reward of more than $2 million per week. However, on his morning show on October 7th he said the two sides are “not anything close” on reaching a deal.
Stern’s contract ends in December and the rumours suggest it will cost SiriusXM a minimum of $80 million to re-sign the talk-show star. But informed sources say that Stern is holding out for a massive $120 million per year, equal to more than $2 million a week. Stern has been at SiriusXM for 15 years and much credit has been given to him for the company’s profitability.
His current contract was for a 5-year period and while the sums involved seem enormous, they are paid to his production company which also includes his staff and researchers.
SiriusXM’s CEO Jim Meyer is due to leave the company at year-end and is reportedly keen to wrap up Stern’s contract before he departs.
“I can tell you that we understand the economics very, very well, for instance, of content like Howard Stern,’ Meyer said in September. ‘I can look every investor in the eye and tell them that is a good investment for Sirius XM.”
SiriusXM, on October 6th, announced a 9.7 per cent increase in its quarterly dividend.
Investment bank Credit Suisse, in a report to clients, welcomed the prospects of Stern re-signing with SiriusXM, and raised their recommendation to ‘Outperform’ from ‘Neutral’. The bank said it expected around 15 per cent of SiriusXM’s subscribers would depart of Stern was not an the air. SiriusXM’s shares rose 4.5 per cent on the report.